Nepal's Business Laws
The legal framework governing foreign investment and company operation in Nepal — from FITTA 2019 to the Companies Act — and the approval procedure every investor must follow.
NPR 20M
Minimum Investment Threshold
1–2 Months
Typical FDI Approval Timeline
NPR 6B
DOI / IBN Approval Threshold
Governing Laws & Acts
Five laws form the backbone of Nepal's foreign investment framework.
Foreign Investment and Technology Transfer Act, 2019 (FITTA)
The foundational law covering foreign investment, technology transfer, and joint ventures in Nepal.
Foreign Investment and Technology Transfer Regulations, 2021
Complements FITTA with additional procedural and regulatory guidance for foreign investors.
Industrial Enterprises Act, 2020
Promotes and regulates industrial enterprises in Nepal, with incentives and simplified procedures for domestic and foreign investors alike.
Companies Act, 2006
Governs company establishment, operation, and registration requirements in Nepal.
Public Private Partnership and Investment Act, 2019 (PPPIA)
Promotes investment by the foreign private sector in infrastructure, construction, and service sectors.
FDI Approval Authorities
Which authority approves a project depends on its size.
Department of Industry (DOI)
Approves foreign investment projects up to NPR 6 billion.
Investment Board of Nepal (IBN)
Approves foreign investment projects exceeding NPR 6 billion.
Nepal Rastra Bank (NRB)
Gives final approval for the foreign currency remittance and records the investment.
Step-by-Step FDI Procedure
The complete process generally takes around 1 to 2 months.
Foreign Investment Approval
Obtain approval from the Department of Industry or Investment Board of Nepal, depending on project size.
Company Incorporation
Register the company at the Office of the Company Registrar.
Tax Registration
Register for PAN/VAT at the Inland Revenue Office.
Local Business Registration
Register the business at the relevant Local Ward Office.
Industry Registration
Register the industry with the Department of Industry.
Non-Blacklist Certificate
Obtain a Non-Blacklist Certificate from the Credit Information Bureau.
NRB Approval to Infuse Investment
Get Nepal Rastra Bank's approval to bring the investment amount into Nepal.
Deposit Investment Amount
Deposit the investment in a local bank and obtain an Investment Certificate.
Recording of Infused Investment
Nepal Rastra Bank records the infused investment, completing the process.
Permissibility Conditions
Two conditions must both be met for a business to receive foreign investment approval.
Not on the Negative List
The industry must not appear on Nepal's Negative List of Industries for Foreign Investment.
Qualifies as an “Industry”
The business must qualify as an “industry” under the Industrial Enterprises Act.
Restricted & Capped Sectors
A small number of sectors are closed to foreign investment, or capped below full ownership.
Not Open to Foreign Investment
- 1.Primary agriculture businesses animal husbandry, fisheries, bee-keeping, fruits, vegetables, oilseeds, pulses, dairy except large industries and agri-tech/mechanisation exporting ≥75% of output.
- 2.Cottage and micro industries.
- 3.Personal service businesses hair cutting, tailoring, driving, etc.
- 4.Arms, ammunition, gunpowder/explosives, N.B.C. weapons; atomic energy and radioactive materials.
- 5.Real estate business (construction industries excluded), retail business, internal courier, local catering, money changer, remittance services.
- 6.Travel agency, tour/trekking/mountaineering guide services, rural tourism including homestay.
- 7.Mass communication media newspaper, radio, TV, online news and national-language motion pictures.
- 8.Management, accounting, engineering and legal consultancy; language, music and computer training.
- 9.Consultancy services with foreign investment above 51%.
- 10.Ride sharing with foreign investment above 70% (amended via Investment Ordinance, Nepal Gazette 2081/12/18).
- 11.Aviation caps: international air services 80%; domestic air services 49%; aviation training institutions 95%; maintenance institutions 95%.
Required Documentation
Documents typically required to apply for foreign investment approval.
- Project report covering background, market, technical, and financial aspects
- Foreign investor bio-data or company profile
- Certificate of registration and corporate documents
- Corporate resolution to invest
- Financial credibility certificate from a bank in the investor's home country
- Investment source documentation and time schedule
- Power of attorney for the approval representative
- Passports of the investor and directors (if a corporate entity)
- Commitment letter stating no repatriation for one year
- Joint venture agreement, if applicable
Fees & Charges
Sector-Specific Approvals After Incorporation
Some businesses need further approval or licensing from the relevant regulator once incorporated.
- Insurance Board— for insurance businesses
- Nepal Rastra Bank (NRB)— for banks and financial institutions
- Department of Electricity Development— for electricity projects
- Department of Tourism— for tourism businesses
- Department of Food Technology and Quality Control— for the food industry